Large Self-insured Employers Lack Power to Effectively Negotiate Hospital Prices

AJMC July 13, 2021
Matthew D. Eisenberg, PhD, Mark K. Meiselbach, BS, Ge Bai, PhD, CPA, Aditi P. Sen, PhD, Gerard Anderson, PhD

This study examines the ability of self-insured employers to negotiate hospital prices and the relationship between hospital prices and employer market power in the United States.

ABSTRACT

Objectives: Self-insured employers cover more people than Medicare, Medicaid, or direct purchasers of private insurance.This study examined the ability of self-insured employers to negotiate hospital prices and the relationship between hospital prices and employer market power in the United States.

Study Design: Repeated cross-section analysis of commercial claims.

Methods: We used the US Census Bureau County Business Patterns data to estimate employer market power at the metropolitan statistical area (MSA)–year level and used the Truven Health MarketScan commercial claims to estimate mean hospital prices and price ratios at the MSA-year level (2010-2016). We...

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